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Given the Cash Flow Stream of the Following Mutually Exclusive

Question 52

Essay

Given the cash flow stream of the following mutually exclusive projects, prove through the incremental investment that Project B, with the higher NPV, will be preferred to project
A.
0 1 2 3 NPV IRR
Project A: -500 150 245 320 46.39 17.76
Project B: -800 360 360 360 50.01 16.65
Incremental investment in B: -300 210 115 40 NPV = 3.63

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0 1 2 3 NPV IRR
Project A: -50...

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